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Government working together with the private sector and labour, has covered a lot of ground in identifying shortcomings that are making Zimbabwe unattractive to Foreign Direct Investors. Last week Vice President Emmerson Mnangagwa launched The Zimbabwe National Competitiveness Report which again listed a number of issues which work against government’s efforts to attract foreign investors. Most of the shortcomings listed in the report have been identified at other fora and are therefore not new.
The report said Zimbabwe’s ability to attract foreign investors was being frustrated by high cost of labour, erratic electricity supplies, high taxes and poor transport infrastructure. The report which was compiled by the National Economic Consultative Forum, calls for an urgent establishment of a Competitiveness Commission to address impediments to the country’s competitiveness on the international arena.
Government Ministers and Members of Parliament agreed at the weekend that the country is not doing enough to attract foreign investment to fund economic growth. The competitiveness report said the country was facing an acute shortage of electricity, forcing companies to resort to more expensive alternative power sources such as the use of diesel generators.
This, it said, rendered the country’s commercial and industrial activities less competitive. The report also said the country had the second highest labour costs in the region after South Africa. It said since Zimbabwe’s productivity per unit of labour compared to other countries is low, it implies that labour costs are a major cost driver which affects the country’s competitiveness.
The cost of transport, the report noted, is high and the situation has been compounded by deteriorating state of roads and railway infrastructure. The country’s tax regime is more costly compared to other countries in the region such as South Africa, Zambia and Botswana. We have already alluded to the fact that most of the shortcomings listed in the latest report are not new and what the report confirms is that a lot has been done to identify the shortcomings and what is left is action.
Last month government pledged to come up with a cocktail of measures to attract FDI and this included among others, amending the Companies Act. The government realised that some investors were being frustrated by long and protracted procedures in their quest to invest in the country hence the mechanisms being put in place to reduce the waiting period.The government, the private sector and labour are all agreed that a lot needs to be done to ensure the country has investor friendly policies so that it becomes an investment destination of choice for foreign investors.
The country cannot continue to lose investors to its neighbours such as South Africa, Botswana and Zambia. It is time the country moves to address its shortcomings in order to create a conducive environment for investment and at the same time starts talking the language that attracts foreign investors.
It is pleasing to note that government ministers and the MPs now appreciate the negative impact of giving conflicting policy statements. We totally agree with Finance and Economic Development Minister Patrick Chinamasa that once there is a disagreement or perceived disagreement, capital runs away. We therefore need not emphasise the importance of speaking with one voice when it comes to issues of investment regardless of our political differences.
At this juncture we want to implore the government, the private sector and labour to, without delay, move to the next step of creating a conducive environment for foreign investment.
Online Reporter
Sidumisile Mabena